WASHINGTON  Meet the people on the winning side of Canadas oil discount  the U.S. environmental activists who have wreaked havoc in the oil sands industry by trashing its practices and shutting it out of new markets by stalling proposed pipelines such as Keystone XL.

They include Susan Casey-Lefkowitz, Danielle Droitsch, Anthony Swift of the Natural Resources Defense Council (NRDC), which bills itself as the United States most effective environmental action group backed by 350 lawyers; and Jason Kowalski and Ben Wesser, with 350.org, a grassroots organization that uses protests and social media to stop climate change.

They are uncompromising, empowered and feel good about their progress in capping the growth of fossil fuels  particularly those from Canada.

Agree with them or not, their record is astonishing: They have outmanoeuvred the powerful oil lobby and stalled the Keystone XL pipeline from Alberta to Texas; they have managed to blame emissions from oil sands fuels for U.S. climate disasters such as Super Storm Sandy; and they believe they are on the cusp of strangling oil sands growth.

Yuri GripasNRDC’s Danielle Droitsch speaks next to advisor and lobbyist Susan Casey-Lefkowitz at their office in Washington in early February.
In interviews in the slick downtown Washington base of the NRDC, the activists were unapologetic about the distress their campaign is causing in Canada  and particularly in Alberta, where pipeline bottlenecks are depressing the price of oil, cutting into company revenues and forcing provincial budget cuts.

The economic distress that we see right now is nothing compared to the economic distress that we will see in the future from the impacts of climate change, said Ms. Casey-Lefkowitz, director of the international program at the NRDC.

The lesson to take away with what is happening with the shortfalls in Alberta is that diversification of the economy is critical
The lesson to take away with what is happening with the shortfalls in Alberta is that diversification of the economy is critical the way forward in terms of our economic and national security is building a world where we depend on clean energy.

Their energy answer for Alberta? Forget the petrostate and switch to wind.

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Never mind that Canada is a sovereign country with the right to make its own decisions.

This is not an issue of borders anymore, she said. And we are seeing that with a lot of our environmental work. Most of the environmental problems are global challenges. And that is why we work so closely with colleagues in Canada.

How did groups like NRDC, 350.org, and their close partners the Sierra Club, the Community Environmental Legal Defense Fund, Friends of the Earth, become so powerful they believe they alone have the right answers on the climate and on energy?

James Vines, a partner in Washington at King & Spalding LLP, a top law and lobby firm representing major international energy players, said environmental organizations have been empowered by deep pockets and the U.S. legal system, which provides many avenues that allow private parties to challenge energy project.

While the fight against Keystone XL has garnered a lot of attention because of its size and because it crosses the Canada-U.S. border, he said its just one of hundreds of fossil fuel projects opposed by environmental non-governmental organizations during the permitting process.

If a permit for a project is granted, Mr. Vines said the fight moves to the courts, where the activists routinely challenge its validity and the validity of the environmental impact studies.

Even when NGOs dont win, lengthy delays often frustrate proponents and some times cause them to give up.

The Albertans are simply not fighting back hard enough
The Canadians are not experiencing in Keystone something that other oil producers arent facing, Mr. Vines said. The Sierra Club and others have very, very deep war chests to challenge all these projects and they win some and they lose some. From their perspective, if they keep one of those projects from being completed, that is a victory.

The attacks are so common that project proponents are now building years of delays and lawsuits into their business strategies, he said.

Mr. Vines said it is disappointing that Keystone XL proponent TransCanada Corp. wasnt able to contain the controversy by doing what other U.S. energy project proponents commonly do  use the legal system as aggressively as the NGOs, with the goal of keeping the permitting process based on fact and science.

Using basic public relations, the strategy largely employed by the oil sands sector, just doesnt get the job done when the opponents are as well-funded and determined as those who oppose K-XL, he said. Successful energy project proponents usually must use the legal system to create a rigorous and defensible formal record on the scientific and legal merit of their project, one that will withstand rhetoric-based counter arguments in the trial and appellate courts.

Indeed, the decision on Keystone XL itself boils down to whether it can cross a border, he said.

But TransCanada has allowed cumulative impacts under the [U.S. National Environmental Policy Act] to not just mean a couple of hundred yards from the border, and then what happens in the surrounding communities, they have allowed the cumulative effects to be the border to the Gulf, the whole 1,300 miles of the project.

Even the messaging was late and poor, making Canada easy to pick on and a soft target, said policy advisor Fred Cedoz, vice-president with GWEST in Washington, who has represented Canadian interests including the Alberta Enterprise Group, an Edmonton-based public policy advocacy group.

The Albertans are simply not fighting back hard enough, Mr. Cedoz said. In the U.S., in order to keep our energy sector alive, we know how to push back on these, we know all the processes to use.

President Obama is expected to rule in the next few months whether to give a permit to Keystone XL, after twice rejecting it because of environmental movement opposition.

Indeed, environmental organizations opposing Keystone XL are planning to use available processes to the fullest.

Because they helped Barack Obama get re-elected, they will be watching for specifics on his climate change intentions when he delivers his State of the Union address Tuesday evening.

And to ensure he stays on plan, they are behind the mass demonstration at the White House planned for Sunday, the day before Presidents Day, when 20,000 people are expected to converge from across the continent to demand rejection of the Canadian pipeline project once and for all.

With the regulatory process on Keystone XL still under way, they said they will keep working on Capitol Hill and on the Administration to ensure a robust discussion on the oil sands impacts on the climate.

Even if Keystone XL is approved, theyve got a litigation strategy in their back pocket to dispute the permit and cause further delays.

The upshot? Keystone XL will not be built by 2015, as TransCanada anticipates, because they will have barely finished the first phase of litigation on the permit, Mr. Vines predicted.

U.S. environmental activists, lead by 350.org and the Natural Resources Defense Council, dont believe a word that Canadian governments, the Canadian oil sands industry and myriad analysts and researchers are saying about environmental improvements, Canadas plans to build pipelines West and East to sell the oil to other markets if the U.S. doesnt want it, that producers are using rail, trucks and barges to move their product in the absence of pipelines.

They believe a rejection of Keystone XL will go a long way to capping oil sands growth, but they are hedging their bets by also working with Canadian partners to stop Northern Gateway, the reversal of Line 9 and any other oil sands pipelines that would enable oil sands exports.

Heres what they are saying about Keystone and the oilsands in general:

On Keystone XL: The Keystone XL pipeline, by virtue of its size, by virtue of the fact that its opening up the Gulf Coast, has grown to be a very significant issue. The NRDC has identified that pipeline to be a very significant decision that signals both the expansion [of the oil sands] and where the U.S. is going on its clean energy policy.  Danielle Droitsch, senior attorney at the NRDC focusing on Canada.

On why Keystone XL is not needed: We made a major stride with car efficiency standards, and Keystone XL is not just about what our energy mix is today, its a 50-year piece of infrastructure that would increase the carbon intensity of the oil we do use, and once its built, we are stuck with it.  Anthony Swift, attorney for the international program at NRDC.

On rail transport: There is no question that marginal barrels are being moved to the Gulf Coast, but the fact of the matter is that rail doesnt support a model that justifies dramatic tar sands expansion.  Mr. Swift.

On continuous improvement in the oil sands: We are not convinced, from the outside looking in, that the environmental impacts are really being addressed. The issue is on the ground, and that includes expanding at these phenomenal rates. Right now the impacts on land, air and water are significant, and the technological improvements are microcosmic compared to what the impacts are.  Ms. Droitsch.

On Chinas investment in the oil sands: Right now China doesnt have the refining and upgrading capacity to take the bitumen. We have a large program in China and an office in Beijing. As far as we can tell, there is no intent by the Chinese government to take that capacity. We treat them more as investors than we do as consumers, Susan Casey-Lefkowitz.

On Keystone XLs contribution to U.S. energy security: We dont believe at all this is going to help energy security. We think this is an export pipeline.  Ms. Droitsch.

On the U.S. relation with Canada if Keystone XL is rejected: I dont think that a rejection of Keystone XL would be a huge blow to Canada, or a huge surprise necessarily. The public concerns from Americans have been very clear, but also concerns in Canada have been very clear, about tar sands development, about the rate of expansion, about what it means climate change within Canada.  Ms. Casey-Lefkowitz.

On the fossil fuel industry: The fossil fuel industry has had their way with the world for a century and needs to be on the way out, Jason Kowalski, policy director, 350.org.